Air Arabia is banking on liberalisation of the Middle Eastern market to drive rapid expansion of its low-cost operation. "Every country will be progressively opening in the next 12 to 18 months," predicts chief executive Adel Ali.
Air Arabia now serves 27 destinations from its Sharjah hub but restrictive bilaterals with several countries prevent it from serving some key markets including Amman and Cairo. Bilateral restrictions also prevent Air Arabia from offering a daily service on most routes. Fifth-freedom flights in the Middle East are prohibited, restricting Air Arabia only to routes from its Sharjah hub.
"Everything we have been given we are utilising," Ali says. "You have to keep negotiating." Ali is confident all the restrictions will gradually be lifted because several countries in the region have already begun opening up their air transport sectors. There is even talk of a regional open skies agreement which Ali says could be signed within two years.
Under open skies, Ali predicts Air Arabia would expand its operation five-fold. It now has seven Airbus A320s and is committed to adding three more this year and another three next year.
Some of the growth will also be directed to the Indian subcontinent. Air Arabia already flies to four Indian destinations and is eyeing more. "They are very lucrative routes. Supply is still short of demand," Ali says.
Air Arabia plans to continue focusing on Sharjah, which Ali says is "convenient enough" to Dubai, despite Dubai's plans to begin targeting low-cost carriers. Dubai Civil Aviation marketing director Anita Mehra Homayoun says it has been turning away low-cost carriers "because we don't have the facilities". However, this will change when the first phase of the new Jebel Ali airport complex opens in early 2008 with a low-cost terminal, she says.
Source: Airline Business
